North American Wine Industry in Transition

The second annual BMO Wine Market Report, which was launched earlier in May, found that the U.S. and Canadian markets remain cautiously optimistic, despite the North American wine industry being at a critical juncture.  

To learn more about how wine businesses are addressing challenges, I sat down with some of the leading experts in the industry at the 20^th annual BMO Farm to Market | Chemicals Conference:

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  Francesca Guidi, Managing Director, BMO Wine & Spirits Group 

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  Andrew Adams, Editor and Writer, WineBusiness 

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  Jon Moramarco, Managing Partner of beverage alcohol advisory, bw166 

Here are some of the key takeaways from our conversation. 

This year, the BMO Wine Market Report expanded to include both the U.S. and Canadian markets, along with a survey of frequent wine drinkers.  

Although 62% of U.S. winemakers anticipate their total sales to increase in 2025, that number is down from 71% in 2024. While reduced demand is a factor in the slowdown, distribution challenges also weigh on the industry, as they cope with rising costs and inventory management issues.  

Recent trade disruptions could put pressure on some U.S. producers as Canada continues to be the top export market for U.S. wineries. As Andrew Adams, the writer and editor of the Wine Analytics Report, a monthly digital publication that covers the U.S. wine industry, explained, even though Canada is a relatively small share of the total U.S. business, it will still have an outsized impact on the wineries that export there.  

Unlike the U.S. market, wine accounts for a higher share of Canada’s overall beverage market. Based on our survey, about 70% of Canadian winemakers expect their total sales to increase in 2025.  

Jon Moramarco, who co-authored the 2025 BMO Wine Market Report and whose company bw166 specializes in data analytics in the alcoholic beverage industry, outlined some of the reasons for these changes, one of which was a shift in overall health messaging regarding alcohol consumption.  

Since the pandemic, there’s been an increased focus on health and wellness. While “Dry January” has existed for years, “Sober October” has joined the ranks of reasons not to drink. Moramarco also pointed out that, as people get older, they naturally tend to drink less alcohol. Given that Baby Boomers have been the biggest wine consumers since the 1990s, the fact that they’re aging out of drinking is having an impact on overall sales.  

Francesca Guidi cited shifting consumer tastes as another reason for the decline, with the 21-to-39-year-old age group preferring to drink a wider range of alcohols. “There’s a lot more diversity, a lot less loyal customer base there, even if they’re frequent wine drinkers,” she said. 

Adams noted that there are signs that the industry is undergoing what he described as a “monumental” change. To illustrate, he pointed to California, where farmers just removed the largest number of vines in the state’s history of grape growing. “Several hundred thousand tons went unpicked last year,” he said. Although some of that number was because it was also the right time to pull those vines, it was also a reflection of weaker demand.  

To further that argument, Adams pointed to an increased number of notable wineries – ones producing quality products and doing all the right things to succeed – that have gone up for sale in the past year. 

Despite the headwinds the industry faces, there’s also reason for optimism, in part due to the innovative problem-solving taking place. For example, direct-to-consumer (DTC) and wine club sales are expected to increase next year, according to Adams. 

A growing number of wineries are also offering more diverse tasting experiences – from inexpensive options to bringing the experiences to a city with an established DTC base. More wineries are also ensuring tasting rooms provide non-alcoholic options, and not necessarily only wine. 

Moramarco explained that wine producers could also benefit from exploring new markets, such as smaller restaurants that serve food the industry doesn’t normally consider for pairings, such as Vietnamese or Peruvian.  

“The marketing challenges require a level of innovation and investment that the wine industry has not made in previous years because of those decades of sustained growth,” noted Adams. “Now they’re being forced to, and that could be good. It’s exciting times in some ways.”